24 Hour Faces Charge from National Labor Relations Board

24 Hour Fitness, San Ramon, CA, filed an answer to a complaint from the National Labor Relations Board (NLRB), which has charged the company with violating federal labor law.

The NLRB’s regional office in San Francisco issued the complaint on April 30. 24 Hour filed an answer to the complaint by the May 14 deadline, according to a source, who says the company denies it has done anything unlawful. A hearing is scheduled before an administrative law judge on June 11.

Both 24 Hour and the NLRB declined to comment on the complaint. The NLRB is an independent federal agency that is vested with the power to protect the rights of employees to join together, with or without a union, to improve their wages and working conditions.

In a press release, the NLRB says 24 Hour violated the National Labor Relations Act by insisting that all employment-related disputes be resolved by individual arbitration. The NLRB says 24 Hour requires its employees to forego any rights to collective or class-action lawsuits or arbitrations, which is in violation of the act.

The charge was filed by Alton J. Sanders, a 24 Hour employee, on Feb. 15, 2011, according to the complaint. The charge then prompted an investigation by the NLRB.

Since at least Aug, 15, 2010, the NLRB says, 24 Hour has enforced its no-class-action policy by asserting it in litigation brought by employees in numerous cases, eight of which are cited in the complaint. In each case, employees, who are not represented by a union, sought to bring workplace-related claims, such as wage and hour violations, on a class-wide basis, according to the press release. In response, 24 Hour sought to compel the employees to submit their common claims to individual arbitrations, citing a policy in its handbook.

The 24 Hour case is one of the cases involving arbitration under review by the NLRB. Another case involves a home building company, D.R. Horton Inc. In January, the NLRB ruled that D.R. Horton violated a section of the act by maintaining, as a condition of employment, a mandatory arbitration agreement that did not allow its employees to file joint, class, or collective employment-related claims in any forum, arbitral or judicial.

Ron Chapman Jr., a Dallas attorney, is representing D.R. Horton in the case. Chapman says the difference between the Horton case and the 24 Hour case is that Horton has a mandatory arbitration agreement whereas 24 Hour’s arbitration agreement has an opt-out provision.

“The crucial factor of the arbitration agreement being mandatory on which the board relied is not a factor in the 24 Hour case, and that’s a very important distinction,” Chapman says. “I think the board’s position in both cases is utterly flawed. The existence of the opt-out provision in the 24 Hour agreement makes it even less likely that that board’s position in that case will ultimately prevail.”

To be clear, Chapman adds, the NLRB itself has not heard the 24 Hour case. Rather, the board's regional director and the general counsel’s office are currently prosecuting the case. The Horton case is on appeal.

“From our perspective, there is no basis in the law for the board’s position, and they created it out of thin air,” Chapman says, referring to the Horton case.

There is a chance that one of the cases could eventually be decided by the United States Supreme Court, Chapman adds.

“If the board continues on the path of propounding this novel theory, then I’m quite certain that the issue will arrive at the Supreme Court in due course,” Chapman says. “If the board continues to flaunt Supreme Court precedent with its interpretation of the law, then yes, the Supreme Court will have to correct that eventually.”